Ethiopia and the European Union have unveiled a significant cooperation agreement valued at 650 million euros ($680 million). This historic accord signifies a vital step in restoring diplomatic relations and supporting Ethiopia’s recovery from a destructive conflict.
The announcement was made during a press conference held in the capital city, Addis Ababa, with Ethiopian Finance Minister Ahmed Side and Jutta Urpilainen, the EU Commissioner for International Partnerships, leading the discussions.
Urpilainen stressed the importance of gradually normalizing relations with Ethiopia, describing this agreement as the “first concrete step” in that direction, following the cessation of hostilities in November of the previous year.
Initially conceived as a 1 billion euros ($1.04 billion) aid package spanning from 2021 to 2027, the EU funding had been temporarily halted due to the conflict that erupted in the northern Tigray region in late 2020. This suspension had been a contentious issue in Ethiopia’s post-conflict recovery efforts.
Prime Minister Ahmed expressed his gratitude for the support, recognizing its significance at this pivotal moment for Ethiopia. He emphasized that this partnership marks a significant milestone.
However, it is essential to note that direct budgetary support to the Ethiopian government remains on hold. Urpilainen clarified that it would only be reinstated once “very clear political conditions” were met, including a program from the International Monetary Fund (IMF). Ethiopia is currently in talks with the IMF to secure assistance for its ongoing economic reforms.
Beyond the cooperation agreement, Urpilainen had planned meetings with Ethiopian Prime Minister Abiy Ahmed and Moussa Faki Mahamat, the Chairman of the African Union Commission. This underscores the broader regional importance of this development.
The conflict in Tigray, marred by severe human rights violations, such as massacres, mass rape, and allegations of enforced starvation, has remained a key obstacle in Ethiopia’s international relations. The EU has consistently insisted on accountability for these crimes as a prerequisite for normalizing relations with Ethiopia.
As Ethiopia and the EU embark on this crucial step toward cooperation, the world watches closely, hopeful for a brighter future for Ethiopia and its people.
Photo courtesy of Ethiopia News Agency (ENA)
By: Montel Kamau
Serrari Financial Analyst
4th October, 2023
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